South Africa will face protests similar to those that toppled governments in Tunisia and Egypt in 2011 unless it fixes broken infrastructure, curbs lawlessness and fosters an environment for investment and job creation, the head of a leading business lobby group warned.<\/p>\n
\u201cWe are in deep trouble,\u201d Busisiwe Mavuso, the chief executive officer of Business Leadership South Africa, which represents some of the country\u2019s biggest companies, said in an interview.<\/p>\n
\u201cWe need meaningful and targeted interventions that will ensure we don\u2019t end up in the doldrums and we don\u2019t end up as another failed African state.\u201d<\/p>\n
Africa\u2019s most industrialized economy is one of the world\u2019s most unequal countries for which data is available, according to the Thomas Piketty-backed World Inequality Lab. Its unemployment rate of 32.9% is third highest in a group of 82 nations and the eurozone tracked by Bloomberg. About a quarter of the population is experiencing food poverty, World Bank data show.<\/p>\n
A continued deterioration would further erode the social fabric of the country and could spark Arab Spring-like protests, Mavuso said.<\/p>\n
In 2021, the eruption of the worst civil unrest in South Africa since the end of White-minority rule claimed 354 lives and saw thousands of businesses being looted. Executives in a World Economic Forum survey ranked \u201csocial cohesion erosion\u201d as one of the country\u2019s top-10 short-term risks.<\/p>\n
Former President Thabo Mbeki, who oversaw South Africa\u2019s strongest period of post-apartheid economic growth that grew the Black middle class, has also warned of anti-government demonstrations.<\/p>\n
The country needs \u201cserious\u201d levels of foreign-direct investment to bolster economic growth and provide employment opportunities, but dysfunctional government-run network industries \u2014 energy, transport and water \u2014 and crime and corruption serve as a deterrent, Mavuso said.<\/p>\n
Fixed investment stands at about 14% of gross domestic product, down from a peak of 22.7% of GDP in 2008, when the country was hit by rolling blackouts that have persisted ever since.<\/p>\n
Power utility Eskom Holdings SOC Ltd. and logistics company Transnet SOC Ltd. are the \u201cbiggest headaches for South Africa at the moment and are the perfect examples of how crime and corruption can suffocate development and drive an economy into the ground,\u201d according to Mavuso.<\/p>\n
A judicial probe found both state firms fell victim to looting and mismanagement during an era of endemic graft, known locally as state capture.<\/p>\n
President Cyril Ramaphosa has declared a state of disaster over electricity supply constraints that pushed Eskom to implement outages, known locally as loadshedding, to protect the grid from collapse.<\/p>\n
Organized business is setting up a fund to raise money to support the National Energy Crisis Committee\u2019s efforts to end the blackouts and reform the electricity sector, Mavuso said.<\/p>\n
With Ramaphosa under pressure to speed up reforms, an upcoming cabinet reshuffle is a \u201cgolden opportunity\u201d to appoint good leaders to key posts that are serious about turning the economy around, Mavuso said.<\/p>\n
Work must also be done to professionalize the public service because civil servants charged with implementing plans aren\u2019t always \u201cequal to the task,\u201d she said.<\/p>\n
Organized business stands ready to assist the government where required, Mavuso said.<\/p>\n
Companies are already helping to boost state capacity in the unit responsible for Operation Vulindlela \u2014 Ramaphosa\u2019s structural reform plan \u2014 and through its Technical Assistance, Mentorship and Development program, where the private sector funds, trains and deploys skilled retirees to support civil servants, she said.<\/p>\n